Introduction

For large businesses, environmental data plays a key role in compliance, procurement decisions, and new reduction initiatives. Historically, environmental data has been a wishy-washy mess of global emissions factors, secondary data and painful Excel crunching. However, by 2025, there is a growing expectation for environmental data to achieve the same level of accuracy and consistency as financial data. Here's what sustainability teams need to keep on their radar.

Trend #1: The 2025 Regulatory Wave Demands More Granular Data

Regulatory pressure is mandating companies to gather more granular environmental data than ever before. Three key regulations are driving this change in 2025:

1. The Corporate Sustainability Reporting Directive (CSRD)

CSRD lists 84 reporting requirements and over 1100 data points. Climate disclosure needs to cover all three scopes and disclosed information will undergo external auditing. This represents a very significant shift from voluntary disclosure to mandatory and verified reporting.

2. The Corporate Sustainability Due Diligence Directive (CSDDD)

CSDDD emphasises the need for precise supplier-level climate data. It's pushing organisations towards a deeper understanding of the environmental impact of their supply chain.

3. The Regulation on Deforestation-free Products (EUDR)

EUDR focuses on preventing deforestation-linked products from entering EU markets. This regulation requires strict due diligence for a range of key commodities, including cocoa, soy, palm oil, coffee, rubber, and cattle products. Companies now need sophisticated traceability systems to prove their products aren't linked to deforestation.

Beyond Costs: The Business Benefits

Let's be clear: meeting these new standards requires significant investment. Initial CSRD reporting costs EU companies about €1.7 billion, with annual costs reaching €1.9 billion. Add another €4 billion yearly for external auditing, and we're looking at substantial figures. While these costs are unavoidable, they do bring operational advantages.

First, better data systems mean better business operations. When you automate your environmental reporting, you'll save time and reduce errors.

Second, with more reliable environmental data comes better decisions. With better data it's easier to spot reduction opportunities.

Finally, these requirements are pushing businesses to work more closely with their suppliers. This deeper engagement often leads to innovative solutions that benefit both parties – from sharing best practices to finding new ways to reduce emissions together.

Trend #2: PCF Networks: The Future of Sharing Emissions Data

The shift from spend-based to activity-based emissions calculations has driven a surge in Product Carbon Footprint (PCF) generation. In 2024 alone, the Altruistiq platform generated nearly 400,000 PCFs. Yet many businesses remain hesitant about sharing environmental data.

This hesitancy makes sense - companies need to protect their intellectual property and sensitive product information. But there's a better solution: sharing PCFs instead of raw activity data.

PCFs provide the emissions insights businesses need (arguably better insight) while presenting significantly lower security risks than sharing raw activity data. They're also easier to standardise and verify across different systems.

Here's how to approach PCF sharing securely:

1. Ask for PCFs first: Instead of requesting activity data, start by asking for PCFs. You'll get the emissions data you need while respecting your suppliers' data security concerns.
2. Use secure sharing methods: Choose dedicated platforms over email for PCF sharing. Establish clear data protection agreements to safeguard your information.
3. Connect with sustainability teams: Many sustainability teams are just starting their PCF journey. Explain what PCFs are and how they offer a more secure alternative to raw data sharing.

Trend #3: Secondary Data is Making a Comeback

When collecting environmental data, primary data has been seen as the gold standard. However, secondary data, when properly used, can be just as effective in identifying emission hotspots and areas for improvement.

True primary data in sustainability contexts is often misunderstood. Authentic primary data involves direct scientific measurements, such as soil testing or satellite imagery. What many consider "primary data", i.g. supplier-shared footprints, is actually a form of secondary data, as it typically incorporates estimates and industry averages.

Higher data accuracy can be achieved by refining secondary data through:

1. Disaggregation: Break down broad categories into specific line items for more precise emissions calculations.
2. Specificity: Use more targeted secondary emissions factors that account for variables like geography, supplier size, and production methods.
3. Incremental Improvement: Consistently push for higher accuracy by refining secondary data sources, potentially achieving 80-95% accuracy without resorting to primary data collection.

Inspirational Case Study: Data Fuelling Action

Let's look at how businesses are turning environmental data into practical initiatives.

From Data to Farm-Level Change

We recently chatted with Danone on our podcast. Here are some of the ways they are currently using environmental data in their initiatives.

• Downstream: Danone shares PCFs with customers and works jointly with them on emission reduction solutions.
• Upstream: They leverage environmental data to implement effective farm-level initiatives. Their data-driven approach helps assess each farm's current state, track progress in regenerative practices, and identify appropriate technological investments.

More on this on our SoS Podcast.